Thursday, February 7, 2008

Wagging the Dog: Is 2008 The Year To See Advertising ROI In The Long Tail?

by Rob Crumpler, Wednesday, Feb 6, 2008 7:31 AM ET
Traffic = eyeballs = money. This characterizes the age-old mentality of the online advertising world: the more traffic a site generates, the more potential consumers are viewing - and clicking on - online ads. But has the proliferation of social media turned conventional advertising wisdom on its head? Are the sites with the most traffic necessarily the ones yielding the best advertising performance?

This topic has been debated ad nauseam since the explosion of social media has captured a coveted slice of the collective consumer attention span. The concept of advertising on social media, like blogs, is nothing new, but since blog advertising has gone mainstream, the debate has gotten even more heated. To date, many marketing strategists have argued that meaningful advertising ROI can't be found by targeting niche blogs within the proverbial Long Tail -- primarily because the level of traffic required to produce results just doesn't exist. Simply put: for advertisers, the Long Tail does not scale.

A month into 2008, it feels like it's time to revisit this assumption. In fact, several trends point to the fact that 2008 may just be the year the Long Tail delivers the kind of performance advertisers are looking for.

The Long Tail and the Power of Influence

We all know that consumer Web usage patterns have changed. Americans aren't relying on the major "clearinghouse" sites for their daily information fix. Instead, people have become much more familiar with smaller sites housing information on niche interests.

There are nearly 113 million blogs in existence, spanning every conceivable, topic, interest and issue, with over 175,000 new blogs appearing each day. About 39% of American adults regularly refer to blogs - that's 57 million eyeballs consuming user generated content instead of mainstream media - and 65% of these folks are explicitly seeking someone's opinion.

Niche publishers in the Long Tail tend to hold two powerful characteristics core to attracting - and influencing - an engaged consumer audience: credibility and expertise on specific topics. An individual publisher's ability to exert these traits online - and, as a result, instill trust with their readers - is fueling a growing trend: consumers referring to the Internet before committing to a purchase. About 65% of online "power shoppers" always read consumer reviews and spend more than 10 minutes reading consumer generated media on products and services before they buy.

To date, credibility and expertise have been difficult to capture, measure and monetize on the Internet. As an industry, our collective emphasis on qualifying media buys has been a "bigger is better" mentality - the thinking is: if a lot people read it, the publisher must be a credible expert. While not necessarily untrue, we now know this premise is certainly not the case across board.

Naturally, brand advertisers will always require volume and scale, but, increasingly, they are looking beyond traditional page view and traffic numbers as a means to inform where to focus their ad budgets. Today's measurement options are inching closer and closer to truly predicting how keen a publisher's audience is to viewing your ad - allowing you to define campaign success by unique users, duration, hits, click-throughs, impressions, queries, sessions, streams, or level of engagement. Factoring the notion of topic-specific influence as a metric to evaluate ad spend - and going deeper in the Tail to find it -- will be key themes in 2008.

New Tools Get Tail Content Ready for Prime Time

Another key development is the increasing publisher savvy when it comes to generating and maximizing revenue. This is spilling over to Tail publishers who are realizing their advertising power, and playing an active role in connecting Tail content with advertisers' deep pockets via ad networks and other means.

Of course, the network players are stepping up to the plate to quickly facilitate this. Firms like Merrill Lynch and JP Morgan forecast that CPM rates are going to shoot up in 2008, in part due to the new and improved, razor sharp targeting technologies empowering the ad networks to slice, dice, aggregate and sell the best Long Tail inventory - all for a price. Like Amazon, umbrella networks' ability to house and sell Tail inventory on the content producers' behalf will spell collective success for everyone involved.

The net effect for advertisers? The ability to reach pockets of engaged consumers across thousands of niche content sites - housed under common themes and topics - in one single ad buy.

Putting Our Heads - And Tails - Together

Another key theme? The integration of popular, mainstream publishing (or "Head" content) with niche content in the Long Tail. Top publishers - everyone from Reuters to WashingtonPost.Newsweek Interactive - are seeing value in offering their readers a comprehensive experience that allows them to navigate between on-topic blog content and the headlines of the day. By shining a very public spotlight on content from the Tail, traditional media companies are catapulting niche players onto the radar screens of the general public - mainstream consumers, and big brand advertisers. In 2008 we'll see additional partner models emerge, enabling the Head and the Tail to band together and leverage each other's strengths - and make it even easier for advertisers to access Long Tail ad buys.

Time will tell whether the Tail will spell success in 2008 - or continue to elude advertisers. But for advertisers looking to surface the most engaged consumer possible, getting out of your head and into the Tail might be a good place to start.

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